and further, it feels like Matrix just progressively becomes more of a mess, like piling on more infrastructure on top existing infrastructure, to sidestep some performance issues.
Essentially "Hey, let's pile on ANOTHER PostgreSQL database, on top of your existing Synapse installation, to hold state information for your client, so it's so much faster to sync up your rooms when you log into a new fresh client!"
Whereas, 9 years into the existence of a protocol, and the lead developer has to present at a developer conference as a 'groundbreaking change' that you can login and see your conversation history within a couple seconds finally: https://youtu.be/eUPJ9zFV5IE?t=601
I'd argue it was just purely the rat race of "the most apps" where all other vendors lost out to iOS and Android. It didn't matter that it had all the essential applications, as well as having plenty of the fads/gimmicks of the time (Angry Birds, Pandora, et al) natively supported, it still boiled down to the normie logic of "BUT I WANNA RUN ALL THE APPS!" There was also the whole culture sentiment of "if you make a niche Android/iOS app and sell it, you could become like a millionaire overnight" that people seemed to clamor around, as another gimmick economy (as The Next Big Thing(TM) after the dot-com bubble).
There was also the tidbit that most of the operating system (outside of Linux kernel and standard utils) was proprietary. It's only when it was pretty much given up on, that they started to open it up as various open source projects. Comparatively Android was far more open source than webOS at the time.